SaabiraChaudhuri

Still, Lilly raised its view for the year, now expecting adjusted per-share earnings between $3.82 and $3.97 versus its earlier view of $3.75 and $3.90.

The Indianapolis company is experiencing one of the steepest "patent cliffs" in the drug industry, grappling with recent and looming generic competition for top-selling drugs as a result of patent expirations. The company lost exclusivity for its former No. 1 product, Zyprexa, in October 2011, and it will lose U.S. patent protection for the blockbuster antidepressant Cymbalta this December.

The company is trying to replenish revenue lost to generic competition for the older drugs by bringing new products to market and by increasing sales of drugs that remain patent-protected. Lilly said earlier this month that it has 13 potential new medicines in late-stage, or phase 3, clinical studies, which could yield new products in coming years.

Tuesday, Chief Executive John C. Lechleiter said Lilly had delivered "solid financial results in the fourth quarter", noting the company "successfully offset a large part of the revenue decline from the Zyprexa patent expiration with growth in other products such as Cymbalta, Forteo, Alimta, Effient and our animal health portfolio."

Looking forward, Lilly said it expects overall revenue growth for 2013, driven by products including Humalog, Humulin, Cialis, Forteo, Cymbalta outside the U.S., and other products, including those in animal health. In addition, it expects significant revenue growth" in Japan and the emerging markets, particularly China.

Lilly reported a profit of $827.2 million, or 74 cents a share, versus $858.2 million, or 77 cents a share, a year earlier. Excluding one-time items, earnings were 85 cents a share from 87 cents. Revenue slipped 1.5% to $6 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of 78 cents a share on revenue of $5.81 billion.

Gross margin widened to 79% from 78.1%.

Mr. Lechleiter said Lilly controlled costs while also investing in research and development. The company currently has 13 potential new medicines in Phase III testing.

Marketing, selling and administrative expenses were down 7.3%, while research and development expenses rose 8%.

The company has already spent $400 million of the $1.5 billion stock-buyback effort it unveiled last month.

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